Billionaire raises his stake in Carbacid to 49.9 percent


Billionaire investor Baloobhai Patel. PHOTO | POOL

Billionaire investor Baloobhai Patel has raised his stake in Carbacid Investments Plc to a new high of 49.9 percent as the company’s profits soared.

The firm’s latest annual report shows that Mr Patel made the additional share purchases in the year ended July, boosting his ownership from 40.38 percent a year earlier.

His stake is now valued at Sh1.6 billion. Mr Patel’s increased investment comes as Carbacid continues to benefit from recovery in its carbon dioxide business while also eyeing expansion through the proposed buyout of BOC Kenya which specialises in production of oxygen and other industrial gases.

Carbacid reported a 28 percent jump in net income in the review period to Sh415 million, a performance that saw it propose a special dividend of Sh0.9 per share on top of a normal payout of Sh0.7 per share for a total distribution of Sh1.6 per share.

The company’s share price rallied 12.2 percent to Sh13.2 yesterday, lifting the paper wealth of Mr Patel and other shareholders. Carbacid’s profit growth was helped by 33 percent jump in sales to Sh906 million.

“The board is pleased to note that entry into new markets and new regions have helped increase sales during the year. This is driven by the group’s delivery promise and the highest quality of product,” the company says in the report.

Carbon dioxide is used in the production of fizzy beverages among other applications.

Carbacid’s chairman Dennis Awori says the company is still keen on pursuing its proposed buyout of BOC despite legal hurdles that has delayed the transaction which was initially expected to close in July.

Former BOC Kenya chairman Ngugi Kiuna, who holds a 7.6 percent stake in the company, filed an objection to the deal at the Capital Markets Tribunal arguing that buyout offer of Sh63.5 per share undervalues the firm.

Another shareholder is also fighting the transaction at the High Court.

“As a result of the objections, the offer has been suspended by the Capital Markets Authority, pending the determination of the proceedings before the Capital Markets Tribunal,” Mr Awori wrote in the report.

“Various steps are being taken to have the matter heard and determined so that a clear position can be established on the offer. We shall keep you informed on the developments as appropriate.”

Carbacid and investment firm Aksaya –which is also majority owned by Mr Patel— made a joint bid to acquire 100 percent of BOC Kenya at a price of Sh63.5 per share or an aggregate of Sh1.2 billion.